The Gentium-Damen Consortium has signed a memorandum of understanding (MoU) with the Bangladesh Steel and Engineering Corporation to conduct a feasibility study for establishing an international standard shipbuilding and repairing factory.
The MoU was signed at the conference hall of the industries ministry on Tuesday.
The Gentium-Damen Consortium, in collaboration with the steel and engineering corporation, will conduct the feasibility study at Patuakhali's Charnishanbaria to determine if a full shipbuilding factory can be established on 105 acres of land.
Gentium-Damen is a joint venture of the Netherlands-based shipbuilding company Damen Group and Singapore based company Gentium.
Industries Secretary Md Abdul Halim said it was yet to be decided how much would be invested by the two parties.
"Besides diversifying export items and creating new employment, the agreement has been made to increase our participation in the shipbuilding industry," said Industries Minister Nurul Majid Mahmud Humayun.
With a $4 billion export earning targeted from the sector within five years, the government drafted a policy for the shipbuilding industry in 2019.
The policy recommends many facilities for shipbuilders such as bank loans at a 4 percent interest rate with a 20-year payback period, tax holiday facilities for 10 years, increasing cash incentives from the current 10 percent, and Tk5,000 crore special fund to ease getting loans.
The shipbuilding industry is a labour intensive one and employment for 1 lakh people will be created in this sector within the next 5 years, reads the policy.
Ronald Briene, Asia Pacific area director of the Damen Group, said, "We have shipbuilding factories in 35 countries including the Netherlands. We want to establish a factory in Bangladesh too. We hope both direct and indirect employment will be created besides the exchange of technology – like that in Vietnam."
At present, some 7,000 big and small naval vessels have been transporting goods and passengers in the waterways. There are 20 international standard and 100 local standard shipyards for building river vessels in the country.
The international standard shipyards are capable of building 100 ships annually on an average. At present, 100-tonne deadweight tonnage (deadweight tonnage is a measure of how much weight a ship can carry) ships are being built in the country.
This shipbuilding factory will be different because all backward linkage factories required for building and repairing will be there.
Deputy Head of Mission at the Embassy of the Netherlands Jeroen Steeghs thinks Bangladesh has high potential in the maritime and shipbuilding industry.
"Today's agreement will take the relation between Bangladesh and the Netherlands to a new height," he added.
According to the Business Wire, the turnover from ship trading in the world will exceed $650 billion with the highest demand for environment-friendly ships by 2026.
During this time, the annual demand for sea-bound small ships and vessels will rise to $400 billion. If Bangladesh can meet even 1 percent of the demand, it will be able to earn $4 billion a year from the sector.